Chipotle Mexican Grill (CMG) PT Raised to $3,285 at Wells Fargo

Wells Fargo analyst Jon Tower raised the price target on Chipotle Mexican Grill (NYSE: CMG) to $3,285.00 (from $2,800.00) while maintaining a Overweight rating.

The analyst commented: "CMG reports Q1 on Wednesday 4/24 (AMC). Our $3,285 price target is based on ~50x our FY25 EPS, which is slightly above the 5-year NTM P/E average of 48.6x. We model EPS of $12, above Street at $11.69. The delta is driven by higher restaurant level margin and unit growth expectations. We model +67bps of restaurant level margin expansion y/y to 26.3%. The expected expansion is from leverage on occupancy (12bps RLM tailwind), lower food costs (25bps RLM tailwind), and other opex (70bps RLM tailwind), partially offset by labor (40bps RLM headwind y/y). Further down, we model G&A +75bps y/y to $189M (~$21M towards an employee conference). Net, we estimate EBIT margin +13bps y/y to 15.7% with a bias to the upside."

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